- The Washington Times - Thursday, July 31, 2003

From combined dispatches

Retired Adm. John Poindexter has decided to resign his Pentagon position after an outcry over a scheme to create an online futures market designed to anticipate terrorist attacks, assassinations and wars in the Middle East, a senior defense official said yesterday.

The official, who spoke on the condition of anonymity, said Adm. Poindexter realized that furor over his involvement in the 1980s Iran-Contra scandal had made it too difficult to get a dispassionate hearing for his unorthodox concepts.

“He is kind of working through the details but expects to within a few weeks offer his resignation,” the official said.

Adm. Poindexter, who leads the Pentagon’s Office of Terrorist Information Awareness, drew fire this week over a scheme to set up an online futures market in which traders would bet on the likelihood of terrorist action, assassinations and wars in the Middle East.

The Pentagon canceled the program fewer than 24 hours after it was disclosed by Democratic members of Congress, who called it immoral and “unbelievably stupid.” The Pentagon had requested $8 million for the program over the next two years.

The project was disclosed Monday by Democratic Sens. Ron Wyden of Oregon and Byron L. Dorgan of North Dakota. Criticism increased Tuesday from lawmakers of both parties, and Senate Armed Services Committee Chairman John W. Warner, Virginia Republican, announced he had an agreement from defense officials to end the project.

Mr. Warner made that announcement after speaking with the head of the Pentagon’s Defense Research Projects Agency (DARPA), where Adm. Poindexter works. Mr. Warner called the program “a rather egregious error of judgment.”

Adm. Poindexter’s office, initially named the Total Information Awareness Office, came under attack earlier this year over plans to develop information systems capable of detecting terrorist activity by surveillance of electronic transactions on a massive scale.

That program’s “Big Brother” overtones triggered a furor over the prospect of government monitoring of private lives, as well as questions over what Adm. Poindexter was doing back in government.

The senior defense official said Defense Secretary Donald H. Rumsfeld had not asked for Adm. Poindexter’s resignation, but it was discussed by other officials who reached an “understanding” with the admiral.

But Mr. Rumsfeld, like Adm. Poindexter, recognized that the admiral’s role in the 1980s Iran-Contra scandal would make it difficult for his often unorthodox proposals to get a fair hearing, the official said.

“We’ve had a couple of programs of varying degrees of merit that have been seen as, certainly, unorthodox, different in terms of the nature of the research being done. It is cutting edge and beyond that in some cases,” the official said.

“Given the circumstances with which we are all familiar in the case of Admiral Poindexter it became difficult to receive an objective reading of that work,” he said.

Adm. Poindexter, who served as national security adviser under President Reagan, was convicted for lying to Congress about secret sales of arms to Iran and the diversion of the profits to fund the contra rebels in Nicaragua. The conviction was overturned.

He was quietly hired by the DARPA in January last year to lead a program to come up with ways to track terrorist activities electronically.

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